NTPM’s 1HFY13 results were well within our expectation. Revenue and earnings came in stronger by 7.1% and 21% y-o-y respectively, largely buoyed by better performance from both the personal care and paper products segments. Stronger baby diapers sales continued to boost the top-line of its personal care segment in tandem with the ‘Dragon baby’’ boom. Margin widened on the back of favourable raw material prices and higher average selling prices. Maintain BUY, with a FV ofRM0.55, based on 13x FY13 EPS.
Within expectation. Revenue increased by 7.1% y-o-y from RM233.4m to RM217.9m while earnings jumped 21% y-o-y from RM18.6m to RM22.5m. The stellar results were mainly underpinned by stronger performance from the personal care segment. The increase in revenue was due to higher turnover from personal care products ( +44.3% y-o-y), supported by stronger baby diapersdemand in the domestic market in tandem with the ‘Dragon baby’ boom. However, tissue products sales moderated slightly by1.6% y-o-y as export sales weakened. PBT expanded by 24.5% on the back of better showing at the personal care (+28.2% y-o-y) and paper products (+23.8% y-o-y) segments. On q-o-q basis, NTPM’s top- and bottom-lines improved by 3.1% and 20.6% respectively, mainly attributed to higher average selling prices of tissue products as well as favourable pulp and waste paper prices.
Better EBIT margin. EBIT margin inched up by 2.2% to 14.3% due to wider margins from paper products (+3.1%) as a result of lower raw material cost and higher selling prices of tissue products. In contrast, margin in the personal care segment was lower by 1% y-o-y.
Setting foot on Vietnam. The group’s recent investment in Vietnam is one of the company’s strategies to target the Indochina markets. It has allocated a total investment of US19.1m to set up a 10 ha plant in Vietnam. In addition, the group is also looking to go into the baby diapers market in Malaysia in a big way by creating a wider range of products.
Maintain BUY. We continue to like the group’s regional expansion plan and expect NTPM to delivery satisfactory results moving forward. Maintain BUY, with a FV of RM0.55.
Within expectation. Revenue increased by 7.1% y-o-y from RM233.4m to RM217.9m while earnings jumped 21% y-o-y from RM18.6m to RM22.5m. The stellar results were mainly underpinned by stronger performance from the personal care segment. The increase in revenue was due to higher turnover from personal care products ( +44.3% y-o-y), supported by stronger baby diapersdemand in the domestic market in tandem with the ‘Dragon baby’ boom. However, tissue products sales moderated slightly by1.6% y-o-y as export sales weakened. PBT expanded by 24.5% on the back of better showing at the personal care (+28.2% y-o-y) and paper products (+23.8% y-o-y) segments. On q-o-q basis, NTPM’s top- and bottom-lines improved by 3.1% and 20.6% respectively, mainly attributed to higher average selling prices of tissue products as well as favourable pulp and waste paper prices.
Better EBIT margin. EBIT margin inched up by 2.2% to 14.3% due to wider margins from paper products (+3.1%) as a result of lower raw material cost and higher selling prices of tissue products. In contrast, margin in the personal care segment was lower by 1% y-o-y.
Setting foot on Vietnam. The group’s recent investment in Vietnam is one of the company’s strategies to target the Indochina markets. It has allocated a total investment of US19.1m to set up a 10 ha plant in Vietnam. In addition, the group is also looking to go into the baby diapers market in Malaysia in a big way by creating a wider range of products.
Maintain BUY. We continue to like the group’s regional expansion plan and expect NTPM to delivery satisfactory results moving forward. Maintain BUY, with a FV of RM0.55.
Source: OSK
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